THE British Virgin Islands has passed new legislation to improve the regulation of the thousands of mutual funds and limited partnerships registered in the off-shore enclave. It hopes the laws will improve regulation of its funds sector and help expand its financial service base. The Mutual Funds Act (MFA) was passed to protect the interests of investors in the private sector while providing fund promoters with a suitable location to manage funds. The Limited Partnership Act (LPS) encourages joint-ventures and offers limited partners protection from third party liability. It also offers anonymity as the names of limited partners do not have to appear on the partnership. Robert Mathavious, the enclave's director of financial services, said the British dependent territory had more than 1,500 mutual funds incorporated in the islands - including many Hong Kong-managed funds - valued at more than US$55 billion. 'The new legislation reflects our ongoing public and private sector partnership and collaboration,' Mr Mathavious said. The MFA allows operators and promoters to manage their funds from wherever they are constituted or to establish new funds through such flexible structures as unit trusts, business companies or limited partnerships. Investors are protected as the act requires private funds to be lawfully constituted under the laws of another country while public funds must be registered with the Government-in-Council. The LPS was developed in response to the needs of the private sector. It was designed to create advantages for companies forming limited partnerships. Regulations such as rules for partnership, code of conduct with clients, partners conduct against each other, legal assistance from the courts and dissolution of partnerships are among the provision outlined in the act.